HISTORY and POLITICS

Costa Rica - History

The first European explorer to encounter Costa Rica was the Great Navigator himself, Christopher Columbus. The day was September 18, 1502, and Columbus was making his fourth and final voyage to the New World. As he was setting anchor off shore, a crowd of local Caribbean Indians paddled out in canoes and greeted his crew warmly. Later, the golden bands that the region's inhabitants wore in their noses and ears would inspire the Spaniard Gil Gonzalez Davila to name the country Costa Rica, or Rich Coast.

Archaeologists now know that civilization existed in Costa Rica for thousands of years before the arrival of Columbus, and evidence of human occupation in the region dates back 10,000 years. Among the cultural mysteries left behind by the area's pre-Columbian inhabitants are thousands of perfectly spherical granite bolas that have been found near the west coast. The sizes of these inimitable relics range from that of a baseball to that of a Volkswagen bus. Ruins of a large, ancient city complete with aqueducts were recently found east of San Jose, and some marvelously sophisticated gold and jade work was being wrought in the southwest as far back as 1,000 years ago. Some archeological sites in the central highlands and Nicoya peninsula have shown evidence of influence from the Mexican Olmec and Nahuatl civilizations.

Of all the Spanish colonies, Costa Rica enjoyed the least influence as a colony. It was initially a tough and unpopular place to settle, with few valuable or easily exploited resources. The Spanish were far more interested in developing their holdings in Mexico and Peru, where vast amounts of silver and gold were being obtained. The early hapless settlers who came to Costa Rica were left largely to their own devices, and the first successful establishment of a colonial city was not until 1562, when Juan Vasquez de Coronado founded Cartago. When Mexico rebelled against Spain in 1821, Costa Rica and the rest of Central America followed suit. Two years later, a faction in Costa Rica even opted to become part of Mexico, sparking a civil war in the country's center between four neighboring cities. After the republican cities of San Jose and Alajuela soundly defeated the pro-Mexican Heredia and Cartago, sovereignty was established.

The first head of state was Juan Mora Fernandez, elected in 1824. Best remembered for his land reforms, Fernandez followed a progressive course but inadvertantly created an elite class of powerful coffee barons. The barons later overthrew the nation's first president, Jose Maria Castro, who was succeeded by Juan Rafael Mora. It was under Mora's leadership that Costa Rican volunteers managed to repulse a would-be conqueror, the North American William Walker. Walker was a disgruntled southerner who thought that the United States should annex Central America and turn it into a slave state. He was a lunatic, and a dangerous rather than charming one. With a piecemeal army of about 50 men, Walker had earlier invaded Mexico, where he had been captured and then released back to the States. Not to be discouraged, he next invaded Panama, where he briefly seized control before being forced to flee--into Costa Rica. After his bid for despotic rule there was defeated by Mora's forces, the indomitable Walker turned his attentions to Honduras. The Hondurans, unlike their predecessors on Walker's list, captured him, and Walker was finally and summarily executed.

Military rule has reared its head in Costa Rica from time to time, though it has not been marked by the sort of violent extremism that has occurred elsewhere in Central America. In 1870, when General Tomas Guardia seized control of the government, he made some of the country's most progressive reforms in education, military policy, and taxation. This same year a U.S. entrepreneur by the name of Minor Keith is contracted to build a road from the capital to the Caribbean.  He does so in exchange for land rights on both sides of the tracks near the Caribbean coast.  Although the contract took him twenty years to complete, during this time Keith began to use the land to cultivate bananas and introduced the cultivation of bananas as a cash crop in Costa Rica.  The Costa Rican civil war erupted in 1948, after incumbent Dr. Rafael Angel Calderon and the United Social Christian Party refused to relinquish power after losing the presidential election. An exile named Jose Maria (Don Pepe) Figueres Ferrer managed to defeat Calderon in about a month, and he later proved to be one of Costa Rica's most influential leaders, as head of the Founding Junta of the Second Republic of Costa Rica.

Under Ferrer's leadership, the Junta made vast reforms in policy and civil rights. Women and blacks gained the vote, the communist party was banned, banks were nationalized, and presidential term limits established. Ferrer was immensely popular, creating a political legacy that firmly cemented Costa Rica's liberal democratic values. In 1987, Costa Rican President Oscar Arias Sanchez garnered world recognition when he was awarded the Nobel Peace Prize for his work in ending the Nicaraguan civil war. During that conflict, both the Sandanistas and the Contras set up military bases in the northern area of Costa Rica, and Arias was elected under the promise that he would work to put an end to this situation. He was able to get all five Central American presidents to sign his peace plan, and Nicaragua is now experiencing relative stability.

Costa Rica - Today

Today, Costa Rica is home to 4.8 million people. Costa Rica is the oldest and most stable democracy in Latin America. Over a quarter of the national budget is spent on education, the result being a 96% literacy rate, one of the highest in the World! The Costa Rican economy today is based on tourism, agriculture and exports of building materials, software and electronic components. The Costa Rican healthcare system has also been recognized as one of the best in the continent. It is for these reasons that Costa Rica offers very attractive real estate investment opportunities. Costa Rica is characterized by an impressive scenic beauty that holds approximately 90% of the world's biodiversity, more variety of butterflies than the whole continent of Africa, tropical beach lined coasts in both the Pacific and Atlantic Oceans, and a majestic stretch of mountains and volcanoes throughout the country from the north-central to the south-central regions. Costa Rica has been described by National Geographic as "the most biologically intense place on Earth."

These characteristics put into proper use, have made Costa Rica a world leader in tourism. In 2004 Costa Rica received more than 1.4 million tourists. This year according to, CANATUR, the Costa Rica Tourism Board, Costa Rica should receive just over 2.2 million tourists. Because of all of these factors, Costa Rica has experienced sustained economic growth which has in turn lead to an important growth and activation of the real estate market. Commercial, residential and tourism related real estate have been at the forefront and have been experiencing increases in increments never experienced before. According to Stewart Title of Costa Rica, in 2007, STCR guaranteed real estate transactions for an approximate value of $2 billion dollars, this amount being four times the total amount guaranteed by STCR since its inception in 1997, showing not only dramatic growth in the sector but also sophistication in the market, reflected in the use of title guarantees such as those provided by Stewart Title Costa Rica.

Costa Rican real estate foreign investment will only continue to escalate as better conditions are given to investors and retirees, as the sector growth increases and novel prime locations arise, and as the demand for Costa Rican tourism related developments continue to grow. The sustained growth experienced in the past decade is likely to also receive a significant boost from the recently enacted Central American Free Trade Agreement with the United States (CAFTA).  All of these factors will more than likely mean a continued economic bonanza for Costa Rica and Costa Rica Real Estate investment in the next decade.